Money-losing auto race never got on track financially

Drivers at the Edmonton Indy

Photograph by: Bruce Edwards
, Edmonton Journal

EDMONTON - The Edmonton Indy cars have stopped running, but the bills keep mounting after Northlands asked Thursday for another $697,000 to cover losses on the defunct race.

The money is needed to pay for acquisition costs incurred when Northlands took over operation of the event in 2008, city chief financial officer Lorna Rosen said.

She didn’t have details about what those costs involved.

Organizers hoped to cover the deficit from future profits, but the race was a consistent money-loser and there was no chance to make up the difference, she said.

“When they came with a final report last year, there wasn’t the connection between 2008 and 2012 there might have been and they didn’t realize these costs hadn’t been dealt with.”

This should be the final payment for the race, she said.

The city has already paid Northlands $14.7 million for costs incurred running the event in 2008-10, before it was taken over by Montreal-based Octane Motorsports.

While it was seen as a sporting success that raised Edmonton’s international profile, it turned out to be a financial disaster.

Octane pulled the plug last fall when it announced it wouldn’t go ahead with the third year of its three-year contract, citing poor attendance and lukewarm response from the corporate community.

Rosen has said Edmonton put $22 million into the race over eight years, including $3 million for a track at the City Centre Airport and other expenses, but received $50 million to $80 million annually in economic benefits.

Coun. Tony Caterina said the city agreed to cover costs when it asked Northlands to take control of the race.

However, a city report indicates it isn’t legally obligated to act in this case.

“I would have thought if it was tied to the first part of the contract, when we took it (the race) as a city and asked Northlands to run it for us, we would have been responsible for outstanding debts,” he said.

“If this was during the time Northlands was involved and there’s no contractual obligation by the city to backstop it, I think we need clarification.”

We encourage all readers to share their views on our articles and blog posts. We are committed to maintaining a lively but civil forum for discussion, so we ask you to avoid personal attacks, and please keep your comments relevant and respectful. If you encounter a comment that is abusive, click the "X" in the upper right corner of the comment box to report spam or abuse. We are using Facebook commenting. Visit our FAQ page for more information.